This project aims to define the basic molecular mechanisms of Hedgehog (Hh) signal transduction in Drosophila. Hedgehog is one of only a few families of signal molecules responsible for directing development in flies and humans alike, and is therefore used to guide the formation and maintenance of almost all tissues. Hh signaling is, however, probably the least well understood of major signaling pathways because of its relatively recent discovery. Drosophila studies have led the way in providing a framework for how Hh signal transduction alters the pattern of gene transcription in target cells, leading to changes in cell fate, proliferation or other behaviors. In the absence of Hh, the transcriptional effector of the Hh pathway, Cubitus interruptus (Ci) is held silent and is slowly processed by partial proteolysis into a transcriptional repressor. Hh signaling blocks Ci processing, eliminating the repressor form, and stabilizing full-length Ci. Hh signaling also activates full-length Ci as a transcriptional activator. The key regulated event in directing Ci processing is phosphorylation of Ci, which is promoted by a scaffolding function of Costal 2 (Cos2), bringing protein kinases to Ci. Two binding sites on Ci for Cos2 were thought to drive this recruitment. Recent data from this project suggest instead that different regions of Ci recruit Cos2 indirectly, perhaps mediated by a Cos2 binding partner, Fused (Fu), and that direct binding of Cos2 to Ci may instead unmask the phosphorylation sites that regulate Ci processing. Those hypotheses will be investigated by physiological studies of the activities and protein associations of designed protein variants and will be extended to study mammalian orthologs of Ci in Drosophila. Activation of full-length Ci by Hh involves activation of Fu as a protein kinase. Recent results from this project show that Casein kinase 1 (CK1) is required for the normal phosphorylation and activation of Fu in response to Hh. The hypothesis that CK1 phosphorylates Fu directly, potentially in a manner regulated by Hh, will be investigated here, alongside further studies of other factors regulating Fu activation and the mechanisms by which Fu kinase activity may also regulate Ci-155 processing.